Warren Buffett seems willing to lose money to make a point, especially against Henry Kravis.

Buffett’s Berkshire Hathaway, in a letter filed yesterday with the Securities and Exchange Commission, said that “substantially all” of its $1.02 billion loss in the fourth quarter on fixed-income holdings came from an investment in the bonds of Kravis-owned Texas utility Energy Future Holdings.

KKR, TPG Capital and Goldman Sachs in 2007 bought EFH in a $44 billion buyout, the largest ever. Since then, natural gas prices have fallen and so has the worth of EFH.

Kravis this spring gave Buffett and other investors the chance to swap their unsecured debt in the unregulated part of the utility, TCEH, for new notes that were secured against assets but worth only 70 percent of the face value of existing notes and mature later.

While other investors swapped, Buffett has not.

“Maybe it is a principle for him,” an energy strategist said. Economically, he should take the swap, but he might want to have the reputation as someone who will not back down, the source said.

Buffett, by not swapping and holding on to loans that have principal due in 2015 and 2016, can in a few years give Kravis headaches.

“He has the ability to drive the [unregulated part of the] company into bankruptcy, but it would be cutting off his nose to spite his face,” the strategist said.

Regardless, Energy Future Holdings may be facing a cash crunch in 2015 that could force the TCEH subsidiary into bankruptcy, the strategist said.

Buffett, who has compared private equity barons to porn shop operators, has clashed with Kravis before.

In 1996, Buffett was a Gillette board member when the company was negotiating to buy KKR-controlled Duracell.

The Oracle of Omaha objected to the acquisition because Gillette would be forced to pay KKR roughly $20 million in advisory fees to buy Duracell. Gillette agreed to buy Duracell over Buffett’s objections.